Asked by Bipul TIWARI on May 27, 2024
Verified
The variable overhead rate variance is:
A) $18,955 F
B) $19,125 F
C) $19,125 U
D) $18,955 U
Variable Overhead Rate Variance
The difference between actual variable overhead incurred and the standard cost allocated based on activity level.
- Perform computations and interpretations of fixed and variable overhead variances, including but not limited to budget, volume, and efficiency variances.
Verified Answer
SP
Shilvi PatelJun 02, 2024
Final Answer :
A
Explanation :
Variable component of the predetermined overhead rate (SR)= $38,700/30,000 machine-hours
= $1.29 per machine-hour
Variable overhead rate variance = (AH × AR)- (AH × SR)
= ($9,812)- (22,300 machine-hours × $1.29 per machine-hour)
= ($9,812)- ($28,767)
= $18,955 F
= $1.29 per machine-hour
Variable overhead rate variance = (AH × AR)- (AH × SR)
= ($9,812)- (22,300 machine-hours × $1.29 per machine-hour)
= ($9,812)- ($28,767)
= $18,955 F
Learning Objectives
- Perform computations and interpretations of fixed and variable overhead variances, including but not limited to budget, volume, and efficiency variances.